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Silver-Gold Ratio Back Above 80-1, Traders See Potential Opportunity in Widening Gap

Dec 15, 2021 – At the time of publication, the silver/gold ratio reached just over 80:1. That translates to mean that it requires a more than 80 ounces of silver to buy an ounce of gold.  For most of modern history this ration has moved between 40:1 and 50:1.  Therefore, at this juncture, silver looks to be extremely undervalues in comparison to gold.  Anticipating an eventual closing of the gap, many investors see a possible opportunity in the making.

In the recent past, with the onset of the pandemic, the ratio rocketed to over 100:1.  The subsequent slashing of rates and massive money printing by the Fed caused gold and silver to rally.  This big move up propelled both gold and silver, but silver experienced a much larger price gain, closing the gap from over 100:1 to approximately 64:1.  Traders and investors are evaluating the current scenario for the possibility of a similar opportunity.

The Fed is scheduled to make a policy announcement this afternoon.  The details as to their course of action are likely to either exacerbate the gap or trigger it’s closing.